In recent weeks, Ferrari acknowledged that as a company they were keeping an eye on the opportunities that could open up in the NFT market.
Ferrari CEO Benedetto Vigna said: “Without a doubt digital technologies, Web 3.0 technologies using blockchain and NFT is an area that may be interesting for us. It deserves some attention.”
While Ferrari could do something about it in the future, other F1 teams have already started to get involved in this familiar but new digital world.
Alfa Romeo, through its partnership with Socios.com , created a strictly limited edition NFT at last year’s Brazilian Grand Prix which caused the price of the team’s currency to spike. Since then, they have also released a few signed memorabilia NFTs.
The Swiss team was one of the first to get into the fan token ecosystem, to which an NFT offering has now been added as a reward for its most loyal fans.
The Swiss team’s commercial director, Yan Lefort , said: “I am convinced that we are witnessing a change in the way sponsorship evolves and how we sell rights and our platforms.
“I think we need to be vigilant in any way we can be innovative, especially when it comes to targeting new customers, etc.
“Our agreement with Socios.com gave us exactly that: the opportunity to enter a world of new business, but I’ll be completely honest: at first I had no idea what we were talking about.”
“I’m not a specialist at all. I had very little knowledge, but I have a feeling that this is exactly where a team like us or even F1 itself should be looking to prepare for the future.”
But Alfa Romeo is not alone in launching NFT . Red Bull has also published its own digital collectibles, 3D models of helmets, cars or cards, through the American platform NFT Sweet .
McLaren has also used the same company to publish some car parts for the McLaren Racing Collective , a site where fans can purchase individual digital components and then build their own complete vehicle if they wish.
Just as Panini football albums or baseball cards became a habit for many people, new generations are seeing NFTs in the same way, something that can be bought, exchanged, displayed or sold.
Glove signed by Antonio Giovinazzi
Ultimately, these are the modern, digital version of collectibles, much like sticker books or sticker books used to be.
There is no going back in the digital world. What we are seeing now is almost certainly just the beginning of what will be more and more campaigns from teams and brands as interest in NFTs continues to grow.
Tom Mizzone , CEO of Sweet , explained that it is a great opportunity and assured that NFTs are slowly ceasing to be “standard digital images”.
“The technology is evolving very fast,” he told Motorsport.com. “Six months ago, the only perception of an NFT was Taco Bell making an animated GIF of a taco and auctioning it off! It was fun and got a lot of attention.”
“But the reality is that right now we’re pushing the limits of how these things can be used. So, for example, NFTs could be added to physical merchandise to validate the authenticity of that merchandise, so you know for sure if that something that a person bought from Red Bull or from McLaren is really authentic.
“Another amazing thing is real-time video. Imagine you’re in a hockey game and a world record is broken. Yes, in 30 seconds you can record that moment and create a video in the form of NFT. We can do the same thing in F1 It’s a very, very powerful thing.”
Opinion on NFTs is divided
If you mention the acronym ‘NFT’ in conversation right now, the opinions of the people around you are bound to be very divided.
There are those who share the vision of the creators: they like the concept of unique digital collectibles, especially if there is a possibility that they can appreciate in value in the future and make a good financial profit.
Then there are those who are skeptical: they don’t understand why NFTs have any value, when anyone on their computer can right click, hit ‘save to desktop’ and have that same digital image for free.
In addition, they see the prices of some NFT collections such as CryptoPunks , which sells for €10 million, as a warning sign of a modern day bubble that will burst.
Max Rabinovitch , director of strategy at Socios.com , says his company spent a lot of time understanding the market before stepping in, because it wanted to offer products that were good for its buyers and weren’t just quick-win files.
“As for the skepticism, I think, to be honest, it’s justified to some extent,” he explained of the doubts some have about NFTs .
“I think just like with any kind of big ‘gold rush’ or boom of this kind of magnitude, there will always be people coming in to do some trick or make a profit no matter what else.”
“There are great ideas out there. Our friends at Dapper Labs are doing an excellent job and laying the groundwork for creating full suite of utility-driven products and NFTs, with a really interesting brand ecosystem.”
“At the same time, some have seen a great opportunity to become a supplier of NFTs, knock on the door of any brand or sport, make some NFTs for them, sell them and make a lot of money.
“And that’s a scenario where they won’t care what happens next, because people will be excited at the time of purchase, but they won’t be the ones left in the bag.”
“But people have picked up on that. And it’s actually one of the big reasons why, as a company, we didn’t jump on the NFT bandwagon early on.”
Mizzone pointed out that those who think NFTs are worthless because they can be easily copied don’t really understand what it is.
“I really think of NFTs less as an investment and more as a way to use open ledger blockchain technology to ensure that whatever item you have is truly yours and is different from the rest, that it’s unique.”
“If I give you a picture of a car that you can copy a million times and send to more people, there’s no value in it.”
“If I give you a picture of a car where you can use the blockchain to prove that you have a particular sequence number and there’s only one of them in the whole world, then yes it’s a real souvenir. It’s the equivalent of having that weird baseball card or that really cool comic book that was limited edition.”
The impact of NFTs on the environment
Perhaps the harshest criticism leveled at NFTs comes from those who question their environmental impact, for example proof-of-work blockchains like Ethereum are criticized for the amount of emissions generated by miners.
However, even though some NFTs are hosted on proof-of-work blockchains, it is very difficult to judge their direct impact, because blocks would be calculated in exactly the same way without NFT transactions anyway.
It’s a bit like trying to find out if you’ve saved carbon emissions by not traveling on a plane that took off without you…
Also, not all NFTs use proof-of-work blockchains. McLaren and Red Bull , for example, use the Tezos blockchain, which has a much lower environmental impact.
As Mizzone points out, a brand that makes a collectible digital marketing campaign can have a much smaller environmental impact than if it made that same collectible in real life with cardboard boxes, plastic and others.
Referring to environmental criticism, he said: “I always like to think of other ways of doing things. Sweet created a giveaway with Burger King with six million winners, where for the first time, instead of winning a plastic toy like was done in the past, you earned an NFT .”
“Now think about what it would take to ship a plastic toy to six million addresses in the US. We put a QR code on the side of the box and delivered a digital toy in the form of NFTs thanks to a green chain.”
“It’s much greener than the previous example. You didn’t have to sort every box with the corresponding toy, and when you think about making and shipping them, most of them end up in the trash, the environmental impact would have been huge.”
Another important key is that the crypto industry moves very fast. Ethereum is already moving towards proof of stake, and other blockchains can adapt as needed.
As Rabinovitch , whose Chiliz blockchain uses proof of authority, put it: “Fortunately, the blockchain is completely digital. coal-fired power plants and rebuild them with solar power instead.
“It’s just a matter of coding new blockchains differently, and that can happen very, very quickly.”
“So, I would say there’s pressure being put on the industry to say, ‘Hey, stay tuned.’ Once the pressure is big enough, I think it’s going to be a pretty quick turnaround.”
Sauber sale promotion
the future way
What is clear is that the current situation that NFTs are in now is not where they will be in a few years.
As Lefort says: “It’s not ‘you press a button and everything is singing and dancing.’ this relationship. I see it as the beginning.”
The world of NFTs will evolve and is changing rapidly. In addition to making the necessary adjustments to address sustainability concerns, the entire ecosystem, after such rapid growth, will likely need to spend some time consolidating to adapt to market forces and move away from the speculative bubble that has been a hallmark of last 12 months.
Adds Rabinovitch, “There’s going to be consolidation and winners, right? Look at the real world, people only care about Topps trading cards and Panini trading cards. There are dozens of companies that couldn’t supply the market sustainably, and they hesitated.”
“Consolidation is going to be based on meritocracy. Which of these projects were smart and did the right thing from the start? Which ones built a community the right way, and not the quick way, winking and pushing, ‘Hey, you can get rich doing this.
“You have to somehow limit what that expectation is. If you make it Wild West with the ‘you can wait to sell this NFT for a million dollars and retire,’ then the primary interest and cash inflow will be from people who are looking for that”.
“There will be a minority of users who will make up the majority of the money that is in the market. Their sole intention will be just to make a profit, and they couldn’t care less about what they are collecting.”
“In that sense, NFTs are no longer useful because no one cares about their collectible value.”
In the end, the success of NFTs in sport, including Formula 1, will depend on the network effect. To win, the brands and the different categories must arouse the interest of the masses.
Rabinovitch said: “The biggest single change will be just inclusion on the internet. The early days were somewhat isolated. It was already there, and it was an information network, but it didn’t connect anything. It didn’t connect outside of itself, and there was no real-world services you could use over the Internet.
“That slowly changed and now we’re at a point where everything happens through it. When you pay your bills, when we have this interview, it’s all connected. And there’s a very strong effect because they’re all in the same system.”
“I think when you talk about digital collectible fans, when you talk about NFTs, it’s going to be a slow but sure path to the same level of networking.”
“You could, for example, connect the partner account to things that will allow you to have experiences in the stadiums, either because you have an NFT or because you’re a token holder. It’s about being part of that community and getting access to those experiences.” off the grid”.
better than the real thing
Mizzone is convinced that ultimately the same characteristics that made baseball and football collectibles so successful for decades will drive the growth of NFTs, especially since their utility is so much greater.
“I think we’re on the right track,” he said. “I have a bunch of baseball cards in my attic, all from the ’80s. I have them in my heart, but I can’t show them.”
“So the idea of having this really cool display utility on your phone, where you can put your stuff in a virtual trophy case and share that with the public and friends, and add a little story like, ‘I was in this race F1 and I got this card, and it’s one of 500 with a limited number.”
“Then there’s that direct attachment to the teams that we love and are passionate about. I think this is on its way to taking over and it’s really interesting to think about how digital collectibles are, in a way, superior to physical ones, harder to counterfeit, easier to display and market.
“This is the real deal. And there’s a lot of excitement about it right now.”
